Decision on U.K. Nuclear Plans Delayed

Source: Dow Jones Newswires

The U.K. government and Electricite de France SA (EDF.FR) are unlikely to agree a guaranteed price for electricity generated by planned new nuclear reactors before the summer, people with direct knowledge of the matter said, further delaying a decision to build the much-needed plants.

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EDF, which has been spearheading the U.K.'s nuclear revival, originally said it expected to make the final investment decision on the Hinkley Point project in southwest England by the end of 2012. The company later revised that to the end of the first quarter this year. That is now looking unlikely because "there's still a lot to be done" in talks with the U.K. government, one of the people with direct knowledge of the matter said.

Another person with knowledge of the talks said the two sides appeared to be quite far apart on pricing and didn't seem to be offering to compromise on their positions. Further delays to an agreement over the guaranteed price adds to questions over whether new nuclear power plants can be commercially viable.

This month, Centrica PLC (CNA.LN) said it had decided not to participate in building new nuclear reactors in the U.K. with EDF, citing uncertainty over overall project costs and the construction schedule. German utilities RWE AG (RWE.XE) and E.ON AG (EOAN.XE) withdrew from U.K. nuclear last year.